QuinStreet settles complaints it misled veterans

FOR-PROFIT EDUCATION

Kentucky Attorney General Jack Conway announces a settlement agreement with QuinStreet, based in Foster City.

Kentucky Attorney General Jack Conway announces a settlement...

Foster City Internet marketing company QuinStreet has agreed to hand over one of its websites to the federal government and pay $2.5 million to settle claims it violated consumer protection laws by deceptively marketing for-profit colleges to military veterans.

California Watch reported this month that Kentucky Attorney General Jack Conway was leading an investigation of QuinStreet with attorneys general in several states.

The investigators claimed that QuinStreet websites were preying on veterans by giving the appearance of being owned or endorsed by the government or the military, when in fact the company was using the sites to generate leads for its for-profit college clients.

Disclosures required

Under the terms of the voluntary settlement agreement announced Wednesday, QuinStreet will transfer the website GIBill.com to the Department of Veterans Affairs and will post disclosures on the hundreds of other websites it operates.

"We felt it was important to do this," Conway said. "We've had some of these schools engage in false and deceptive advertising to try to get leads and to try to get their hands on these benefits."

The amount of federal military education benefits going to for-profit colleges has increased significantly in part because the benefits don't count toward the percentage of revenue a college can get from federal sources.

According to company filings, QuinStreet generates nearly half of its business from education clients, and nearly all of its education clients are for-profit providers. The company operates an estimated 700 education websites, Conway said, including more than a dozen that advertise "military friendly" colleges and "GI Bill schools."

Information sold

QuinStreet collected and sold people's personal information as leads to for-profit college clients, Conway said.

A QuinStreet official did not respond to a request for comment. But in a filing posted Wednesday with the Securities and Exchange Commission, the company said it had cooperated with investigators to provide more clarity and to avoid a potentially lengthy legal process. The company denied wrongdoing.

Conway said his office began looking into QuinStreet nine or 10 months ago after hearing complaints about GIBill.com. Together with Holly Petraeus, assistant director for service member affairs at the Consumer Financial Protection Bureau, Conway's staffers examined more than 8,000 e-mails from people who had submitted personal information through GIBill.com.

"It was pretty clear they thought they were interacting with government," Conway said. "You could see that they were assuming that the website had access to veterans benefit information."

Visitors to military-related QuinStreet sites could search for schools that fit their interests, but the sites would provide lists of only QuinStreet's for-profit clients, Conway said.

'Reprehensible'

Amy Fairweather, director of policy for the San Francisco nonprofit veterans group Swords to Plowshares, said QuinStreet's marketing tactics were disheartening.

"It's just reprehensible to me that people are sort of seeing dollar signs and swooping in and taking advantage of people for their own ends," she said.

Under the agreement, QuinStreet agreed not only to give up GIBill.com and related Facebook and Twitter accounts within 10 days but also to stop using the term "GI Bill" in any of its Web addresses. QuinStreet also operated the sites MilitaryGIBill.com and GIBillAmerica.com, both of which have already been taken down.

The company has 15 other military-related education websites that QuinStreet will have to modify in the next several months.

Each site requires a disclaimer that it is not affiliated with any government agency and must provide other disclosures. Each has to refer visitors to the official U.S. government website for veterans.

For the hundreds of nonmilitary-related education websites QuinStreet operates, the company can't imply that the sites are neutral or unbiased unless they have information from a truly independent source.

California not involved

Any of the states that signed on to the deal can go after QuinStreet if it violates the terms of the agreement, but only after giving the company time to respond.

California did not participate in the agreement. Conway said he had talked to Attorney General Kamala Harris about the issue and that California was close to signing on, but that Conway decided to move forward with the 20 states that agreed to participate right away.

A spokeswoman for Harris' office did not respond to a request for comment.